Scaling the energy transition journey
To help with a successful journey to net zero, consider scaling five verticals in a phased manner, aided by various drivers and enablers, including finance, workforce, technology, and business models.
Stanley Porter
Geoff Tuff
Kate Hardin
Anshu Mittal
Jaya Nagdeo
To achieve net-zero emissions by 2050, coordination across industries and economies can help to sequence the introduction of new policies and technologies. Regions will likely proceed at their own pace, with issues such as workforce readiness, supply chain visibility, cost advantages, water availability, and energy accessibility determining decision-making. The transition is getting underway amid market uncertainty, meaning that individual companies and entire sectors may be forging new supply chains, addressing technology risk, assessing price risk, and, in many cases, launching pilot projects. Governments are stepping in with policies to help mitigate areas of possible market concern, but innovative financing and cross-sectoral partnerships could be increasingly important. Through cross-sector collaboration, a system-of-systems approach can help sequence implementation of new policies and technologies, while helping to respond to unforeseen consequences.
Five strategic verticals may require scaling, innovation, and adaptation to help catalyze impact globally. Progress within and across these verticals could not only expedite the journey toward achieving net-zero goals but also demonstrate the interdependence of advancements in these areas. These five verticals are as follows:
1. Prioritizing infrastructure decarbonization: Much of the current housing stock and built environment will be with us for years to come, and it’s important to start reducing their carbon footprint now. Similarly, many energy projects have an average lifespan of 20 years to 40 years, so planning for lower carbon and other greenhouse gas emissions is important over the long-term project horizon.1 Acting now to capture emissions holds greater significance than postponing the process to tomorrow. For instance, applying the standard time value principle shows that, capturing 1 million metric tons per annum of carbon in 2050 is equivalent to capturing only 0.35 million metric tons per annum today, underscoring its substantial time value.2
2. Expanding and modernizing the power grid for a clean energy transition: Currently, there exists a 5x to 7x gap between the development cycle of the grid and that of renewable energy sources.3 Constructing a new grid typically requires five to 15 years, while the implementation of renewables spans only about one to five years.4 Further, more than 70% of the US electricity grid is over 25 years old, highlighting the need for comprehensive upgrades and modernization efforts, while maintaining consumer affordability.5
3. Boosting industrial manufacturing capacity for the energy transition: Manufacturers, while reducing their emissions and enhancing efficiency, play a vital role in helping customers adopt an evolving product suite focused on energy efficiency and lower carbon emissions. Yet, achieving this dual objective is often challenging, due to concentrated supply chains, market uncertainty, nascent market demand for low-carbon products, and a workforce skills gap.
4. Promoting metals and mining sustainability in critical supply chains: The energy transition is expected to reduce fossil-fuel reliance while increasing reliance on metals and minerals. The transition to wind and solar is expected to lead to a nearly 10x increase in metals, minerals, and materials demand, compared to conventional energy sources.6 Similarly, electric vehicles, on average, require 2.5x more copper than a typical internal combustion engine car.7 This growing dependency is expected to alter supply chains, cost structures, and business models.
5. Advancing land, water, and waste stewardship: Slowing the pace of global temperature rise necessitates careful stewardship of our remaining resources. Key among these are land, which serves as vital carbon sinks; water, essential for industrial processes, energy generation, and human life; and waste, which can be transformed into valuable industrial feedstock. Achieving new levels of stewardship will likely require additional collaboration and innovation across industries and communities.
How can action be catalyzed across these five strategic verticals to help ensure the progression of the transition? Consider the following:
- By tri-phasing scaling: Recognize the importance of incremental and sequential progress, whereby the process of decarbonization starts at the asset level (for example, a machine, process, or facility), followed by scaling up at the system level (such as a set of machines and processes or multiple facilities), and culminates in the integration of diverse systems or sectors into a cohesive low-carbon ecosystem (for example, across processes, technologies, supply chain, vendors, and sectors).
- By facilitating acceleration: Leverage enablers such as technology, talent, finance, and innovative business models to help expedite the transition’s pace by offering vital support and momentum.
- By serving as transition architects: Drive action among policymakers, companies, and consumers who may play pivotal roles in shaping the trajectory of the transition, ultimately determining its outcomes.
These five verticals, working in tandem with the cross-cutting enablers, can set in motion the wheel of energy transition.
To learn more about each vertical, hover and click on the graphic below.
Scaling needs to happen across five verticals in a phased manner, aided by various enablers and architects
Architects
Policymakers
Companies
Consumers
Speed enablers
Technology
Talent
Financing
Business models
Tri-phased scaling
Phase 1: Asset transformation
Phase 2: System transformation
Phase 3: Cross-systems transformation
But these changes must be accomplished with urgency. Major historical transformations like the Industrial Revolution, the transition from the basic telephone to a smartphone, from the concept of computer intelligence to generative artificial intelligence, and advancements in aerospace and genomics, all took much more than 30 years to become globally pervasive (figure 1). The journey to net zero, however, is on a relatively short timeline, especially when considering the scale of transformation. From increasing renewable energy fivefold to decarbonizing buildings, transportation, and industries, this goal could profoundly reshape nearly every facet of our social, political, economic, industrial, and infrastructural landscape.8
Read more about each of these five verticals, and the comprehensive strategies for sequencing and achieving sustainable progress, in our Road to scale series.